Key takeaways
- Nest charges members a 1.8% contribution charge plus a 0.3% annual management charge, and charges employers nothing to use the scheme.
- Royal London does not publish one standard workplace pension charge; the annual management charge depends on the scheme, and members can see theirs in the Royal London app or on their annual statement.
- Royal London is a mutual and adds a discretionary ProfitShare of 0.15% to eligible unit-linked pensions; the 2026 award totals £199m across about 2.4 million customers.
- Nest is an authorised master trust run under trust law; Royal London's workplace pension is not on the Pensions Regulator's list of authorised master trusts.
- Nest has a public service obligation to accept any employer that wants to use it for auto-enrolment.
- At 31 March 2025 Nest managed £49.7bn for 13.8 million members; Royal London reported £38bn of workplace pension assets and 2.2 million members for 2025.
- Both schemes can be used to meet the auto-enrolment minimum of 8% of qualifying earnings, with at least 3% from the employer.
Nest and Royal London both run large workplace pensions that meet the auto-enrolment rules, but they are built for different employers. Nest is a free, government-backed master trust with one fixed set of charges for everyone. Royal London is a customer-owned mutual whose charges vary scheme by scheme, typically with a financial adviser involved, and it adds a yearly ProfitShare to eligible pots.
This page compares them on charges, structure and fit. It does not rank them.
How do Royal London and Nest compare at a glance?
The main differences are who sets the charge and how the scheme is governed. Figures below come from each provider’s own pages, checked on 6 November 2026.
| Feature | Nest | Royal London |
|---|---|---|
| Employer fee | None | Not published; adviser fees may apply |
| Member charges | 1.8% of contributions plus 0.3% a year | Annual management charge set per scheme |
| Extra paid to members | None | ProfitShare, 0.15% in 2026, not guaranteed |
| Structure | Authorised master trust | Contract-based workplace pension |
| Ownership | Nest Corporation, a public body | Mutual, owned by customers |
| Size | £49.7bn, 13.8 million members (March 2025) | £38bn, 2.2 million workplace members (2025) |
| Must accept any employer | Yes | Not stated |
What does Nest charge?
Nest charges members 1.8% on each new contribution and 0.3% a year on the whole pot, and nothing else. Nest’s charges page says the charges are the same for every member, whatever fund they use or how much they have saved.
Nest’s own example: £1,000 paid in over a year with a £10,000 pot costs £18 plus £30, so £48 in total. For employers, Nest says “We don’t charge you any fees to use Nest.” Your payroll provider or bookkeeper may still charge for running it.
What does Royal London charge?
Royal London charges members an annual management charge (AMC) that varies by scheme, so there is no single published rate. Members can find their own charge in the Royal London app or on their annual pension statement. Royal London’s own illustration uses a 0.50% AMC, but it says this is only an example.
Royal London’s employer pages also say advisers may charge for their services and should agree fees upfront. Its transfer options for employers switching in all involve an adviser, so ask for the full cost, including advice, before you compare.
What is Royal London ProfitShare?
ProfitShare is a discretionary boost that Royal London adds to eligible pensions because it is a mutual with no outside shareholders. Its ProfitShare page gives a rate of 0.15% for the latest award, the same rate since 2020, after 0.18% from 2017 to 2019.
- The 2026 award totals £199m, shared with about 2.4 million customers.
- Plans must have started on or after 1 July 2001 and be in force on 31 December and on the award date.
- Awards are made on 1 April and Royal London aims to add them by 30 April.
- Royal London does not guarantee an award every year.
How are the two schemes governed?
Nest is a master trust, so trustees run it and the Pensions Regulator authorises and supervises it. It appears on TPR’s list of authorised master trusts.
Royal London’s workplace pension is not on that list. It is a contract-based pension, regulated by the Financial Conduct Authority and the Prudential Regulation Authority. An Independent Governance Committee assesses whether it gives value for money on charges, investment and service, and publishes a report each year. See master trust pensions for how the two models differ.
What does it cost a member? A worked illustration
The cost to staff depends mainly on pot size and how much goes in each year. This illustration uses one member with £1,000 paid in during the year and a £10,000 pot.
| Scheme | Approximate yearly cost | Basis |
|---|---|---|
| Nest | £48 | Nest’s own example |
| Royal London at a 0.50% AMC | £50, or about £35 after ProfitShare | Royal London’s example rate, less 0.15% |
This is not a quote. Your scheme’s AMC may be higher or lower than 0.50%, and ProfitShare is not guaranteed. The bigger the pot, the more Nest’s 0.3% and Royal London’s agreed AMC drive the cost, and the less the 1.8% contribution charge matters.
Which suits your business?
Use this decision list as a starting point.
- If you want a free scheme you can set up yourself today, Nest has no employer charge and must accept you.
- If you employ a few staff on modest pay, Nest was built for that market; Nest says 98% of employers using it have fewer than 50 employees.
- If you already use a financial adviser, ask them to quote Royal London’s AMC for your workforce and compare it with Nest’s fixed charges.
- If you want employee engagement tools and advised support, Royal London’s adviser-led model may suit, at a price you should confirm.
- If cost to staff is your main test, get the AMC in writing and model it against your real pay and pot sizes.
What to do now
- Ask for Royal London’s quoted AMC through your adviser, in writing, with any adviser fees.
- Check payroll fit. Ask your payroll software which schemes it sends files to. See pension payroll integration.
- Confirm your duties in our auto-enrolment guide; they are the same whichever scheme you choose.
- Compare more widely with our workplace pension providers compared and Nest review.
Frequently asked questions
Is Royal London better than Nest?
Neither is better for every employer. Nest is free for employers with fixed member charges; Royal London’s charge varies by scheme, typically arranged with an adviser, and it adds a discretionary ProfitShare.
Does Royal London charge employers?
Royal London does not publish an employer fee on the pages we checked. Advisers who set up the scheme may charge, and Royal London says those fees should be agreed upfront.
What is Royal London’s ProfitShare rate for 2026?
The latest rate is 0.15%, the same as each year since 2020. The 2026 award totals £199m and is not guaranteed in future years.
Is Royal London a master trust?
No. Royal London’s workplace pension is not on the Pensions Regulator’s list of authorised master trusts. It is a contract-based pension overseen by an Independent Governance Committee.
Can I move from Nest to Royal London?
Yes. You can change scheme for future contributions, and staff can choose to move existing pots. Royal London offers fully advised, adviser-led and Royal London led transfer routes, all with an adviser’s support.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 6 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.